Mergers and acquisitions

Challenges to new marketing channels, as reported by organizations surveyed
Ranked by frequency of mention
Rank*	Challenge
1	Lack of experience in M&A deals
2	Lack of perceived value in merger or acquisition
3	M&A responsibility lies with parent company
4	Lack of appropriate opportunities
* Based on 492 responses from our global multi-sector survey. Rank order may not reflect statistically significant differences in all cases. Unclassified/refused responses not shown.

Factors enabling mergers and acquisitions, as reported by organizations surveyed
Ranked by frequency of mention
Rank*	Enabling factor
1	Acquisition or merger to enter new product/service markets
2	Continuous searching for opportunities based on a defined profile
3	Enhanced capability to analyze concrete M&A opportunities
4	Acquisition or merger to enter new geographical regions
5	Ongoing discussions regarding merger proposal with counterpart
6	Offer made to organization
* Based on 492 responses from our global multi-sector survey. Rank order may not reflect statistically significant differences in all cases. Unclassified/refused responses not shown.

In the US and UK, only 1 in 10 organizations surveyed were actively seeking to benefit from M&A activity.

Summary: M&A opportunities seem to be growing in importance in several nations and sectors. But a lack of experience is cited as the number one barrier to success.

Mergers and acquisitions (M&A) rank 9th in our list of the top 10 global opportunities for organizations in 2011.

This relatively low ranking doubtless reflects the recent downturn in M&A activity; on average, respondents expected M&A to rise on the opportunity ladder in the year ahead.

Opportunity outlook and impact

Our survey found indications of the growing importance of this opportunity in several nations and sectors.

Geographic view

This opportunity ranked, in relative terms, highest for executives in Russia and China, perhaps reflecting the fact that many companies in these markets are focused on rapid growth and international expansion.

M&A opportunities are seen as rising in the majority of geographies surveyed. In five of the six sectors we looked at, (M&A has less relevance for the public sector, aside from state-owned enterprises), M&A was expected to have potentially greater impact as a strategic initiative in 2013 than today.

Sector perspective

Executives in life sciences and retail gave this opportunity a great relative priority than other sectors. However, life sciences may feel that efforts to "buy in" innovation have reached a peak.

Obstacles to success

The most frequently mentioned barriers to M&A opportunities include:

1. A lack of organizational experience
2. A lack of perceived value.

These perceived challenges were highest among health care organizations, although this may reflect lower use of M&A in that sector.

We also found that executives from the BRICs and the Middle East perceive significantly more barriers to M&A than respondents in Europe and the US. This may well reflect a lack of experience among fast-growing companies in developing countries that have historically relied upon organic growth.

Challenges to mergers and acquisitions, as reported by organizations surveyed

Responding to the opportunity

We found that the two most frequently reported factors enabling M&A success were:

1. The use of M&A deals as part of a strategy to enter new product or service markets
2. Continuous and systematic searching for opportunities, based on a defined target profile

Factors enabling mergers and acquisitions, as reported by organizations surveyed

Sector strategies

• The health care sector was significantly less likely to report that M&A opportunities were a key part of their strategy for growth.
• Banking was the least likely sector to be currently considering M&A opportunities.
• 2 in 10 power and utilities companies surveyed were currently evaluating a specific merger or acquisition opportunity — twice as high as companies across all sectors.

Geographic approaches

• A relatively high proportion of BRIC organizations were currently monitoring the market for acquisition opportunities. In India, 6 out of 10 respondents expressed interest.
• Organizations in the major continental European economies were also active in monitoring markets for opportunities.
• In the US and UK, only 1 in 10 organizations surveyed were actively seeking to benefit from this strategic initiative.

Organizations' responses to M&A

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